Treasurer Josh Frydenberg’s second budget, delivered as the nation grapples with policies to deliver a post-COVID economic recovery, marks an important milestone in building a competitive digital economy, the tech sector’s leading industry group says.
With major billion dollar investments in creating digital capability across the economy, including a focus on the small and medium-sized enterprises (SMEs), Australian Information Industry Association chief Ron Gauci welcomed the investment in 5G and broadband infrastructure, government digitisation programs, investments in digital skills, apprenticeships and cyber uplift capability.
The decision by government to reverse proposed cuts to the R&D tax incentive was welcomed after the AIIA had long advocated for its continued targeted assistance for startups and the innovation tech sector.
AIIA chief executive Ron Gauci said the COVID-19 crisis had demonstrated the importance of technology across the economy, and the investments government had outlined in the budget were in line with what the industry had sought in relation to jobs, to skills, to digitising the economy and in R&D.
“The change in tone that we are seeing from government [in relation to technology] is welcome and is in line with our expectations of what the economy needs,” Mr Gauci said.
“The economy is very reliant on the growth of our domestic [tech] capability, and in particular our SMEs. Overall, we are very pleased with what is in the budget papers, not only for It but for the future of technology in Australia.
“We think this is a step in the right direction for building a sustainable domestic capability.”
The October 2020 budget lays the groundwork for further important measures in the May 2021 budget to fully realise the government’s ambition for Australia to become a leading digital economy.
With the impending retirement of Mathias Cormann, Mr Gauci said there was a reshuffle opportunity to create a new role of Minister for Digital Capability to ensure that whole of government and whole of economy digital initiatives that are critical to Australia’s future are represented in Cabinet.
“What we are suggesting is that now that we’ve recognised the role that technology has played in getting us through COVID, that digitising the economy and creating opportunity for the country requires an approach that should be managed by – and overseen by – a [single] minister that is responsible for the digital economy,” Mr Gauci said.
“At the moment the digital portfolio is spread between three to five minister, and we think there would be more gained if there was a single point of accountability.”
The $800 million in funding to bolster the digitisation of Australian businesses will see an enhancement of Australia’s digital infrastructure. It will support the digitisation of the government’s business register, expansion of the digital identity system, help underpin SMEs’ transition to the digital economy and boost business access to the 5G network.
The budget also delivers an investment to upgrade the NBN ($4.5b) to boost speeds and a further $1.67b in funding for the nation’s cyber security strategy but the AIIA says more can be done.
Mr Gauci said: “While this will bring great benefits to the Australian economy, it doesn’t address the current important skills shortages in key ICT roles. The Government must continue work to address Australia’s digital skills to support our digital transformation and digital sovereignty,” Mr Gauci concluded.”
Meanwhile Australia’s most successful deep tech incubator Cicada Innovations chief executive Sally-Ann Williams welcomes the $2 billion increase to the R&D tax incentive and the $1.5 billion pledged to support the future of Australian manufacturing.
“Long term investment in R&D will be an effective driver of both recovery and future growth. Recovery will not occur overnight, and so the policy levers to support it should be similarly forward-thinking,” Ms Williams said.
“Modelling performed on our own incubatees demonstrates that for every $1 of revenue generated by a deep tech company, $3 of combined economic value is created for broader society.
“It is clear that these companies hold significant potential for value-creation, but also require decades-long investment and support if they are to reach that point of explosive growth and value creation.
“Examples of this are Australian companies such as Cochlear, ResMed, and CSL Limited, that are now valued at $12 billion, $35 billion, and $127 billion respectively. These companies took several decades and significant investment in R&D to grow from research innovation to global success.”
For a deep dive into this year’s federal budget with the InnovationAus team and special guests, register now for InnovationAus’ Budget Insider 2020 webinar today Wednesday October 8th at 17:30. Registrations close at 15:00.