The Morrison Government is investing almost $1.2 billion in Australia’s digital future through the Digital Economy Strategy, as part of this year’s Federal Budget.
The strategy outlines the policies and actions the Government is taking to grow Australia’s future as a modern and leading digital economy by 2030.
Prime Minister Scott Morrison says Australia’s biggest challenges and opportunities turns on how we respond to the digital transformation occurring in every sector and every facet of our lives.
“Every business is now a digital business. The tradesman or woman who seeks work browses AirTasker. The landscaper who finds most of their new business uses search engine placement and social media. The farmer who keeps track of their herd uses electronic tags or drones. The local Thai restaurant now sells through UberEats, MenuLog, Deliveroo, or any one of half a dozen different food apps. The gym members book their classes through an app”, the Prime Minister notes.
“This transformation is not merely a national one that needs to happen—it’s a global one that is happening”, he says. “We must keep our foot on the digital accelerator to secure our economic recovery from COVID-19.”
The strategy targets investment in emerging technologies, building digital skills, encouraging business investment, and enhancing Government service delivery.
Through the strategy the Morrison Government is investing in jobs for Australians now and into the future with key initiatives including:
Over $100 million to support digital skills for Australians including a new pilot program for work-based digital cadetships that offer a flexible way for workers to build digital skills, investments in the cyber workforce, and scholarships for emerging technology graduates.
Building Australia’s capability in Artificial Intelligence (AI) with $124.1 million in initiatives, including a National Artificial Intelligence Centre led by CSIRO Data 61, supported by a network of AI and Digital Capability Centres to drive adoption of AI across the economy.
Enhancing Government services through a $200.1 million investment to overhaul myGov, making it easier than ever for Australians to find the services they need, as well as a $301.8 million investment to enhance the My Health Record and an expansion of the digital identity system.
Investment incentives to support business growth, including a Digital Games Tax Offset of 30% to support Australia taking a greater share of the $250 billion global game development market, and changes to the way businesses can claim depreciation of intangible assets like intellectual property and in-house software.
Helping small and medium businesses build their digital capacity through a $12.7 million expansion of the Digital Solutions - Australian Small Business Advisory Service, and $15.3 million to drive business uptake of e-invoicing.
$35.7 million to support emerging aviation technologies like drones, including grants to support and address priority needs in regional Australia.
Unlocking the value of data in the economy and setting the standards for the next generation of data management, including $111.3 million to accelerate the rollout of the Consumer Data Right in banking, energy, and telecommunications.
Strengthening safety, security, and trust with over $50 million to enhance cyber security in government, data centres and future telecommunications networks.
Treasurer Josh Frydenberg notes a “vibrant digital economy is key to Australia’s economic future.”
“Our Digital Economy Strategy will allow Australian businesses to capitalise on the opportunities that digital technologies are creating,” the Frydenberg says. “Greater digital adoption will improve our competitiveness and lift our productivity—driving job creation and higher wages.”
Minister for the Digital Economy, Senator Hon Jane Hume, says the 2021-22 budget represents a landmark investment in Australia’s digital future.
“So many Australians are already participating in the digital economy, some without even realising it. Every contactless purchase, e-invoice, business website or small business going online—it’s all part of it and it’s growing rapidly,” Minister Hume recognises.
“This is a really exciting announcement, which will drive investment and uptake of emerging technologies, unlock the value of data, build skills for a modern economy, and enhance Government service delivery”, she says. “We want to improve Australians’ standard of living, create jobs and make access to Government services easier.”
“Twenty years ago, you might have looked in the phone book to find a plumber, now we use Google and comparison services. We get quotes within the same day and pay software generated invoices on our mobiles. Think about how much time and administration work that saves. Australians rightly expect the Government to keep up with them, and to help chart the next step forward, and that’s exactly what we are doing with this Strategy”, the Minister adds.
The strategy builds on the Morrison Government’s investments in infrastructure, skills, cyber security, regulations and digital trade, taking the digital economy spend to around $2 billion over the 2020-21 and 2021-22 budgets, on top of the $1.67 billion Cyber Security Strategy 2020, $1 billion for JobTrainer and the $4.5 billion investment in NBN upgrades.
The full Digital Economy Strategy will be released on Budget night, alongside further measures that support and complement the Strategy.
The fintech sector, she says, “will especially welcome the ability to depreciate software, patents, designs, copyrights more quickly. It’s a starting point for a broader change in allowing and creating a separate pool of funds for software innovation with the research and development tax incentive.”
“The $124m to establish a national artificial intelligence centre led by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) will go towards helping all startups innovate. AI’s role in future fintech innovations cannot be understated”, she says.
“We’re also pleased to see the government drive ahead with its plans to create a single digital ID for Australians that can be used across multiple services. We look forward to working closely with legislators on this, as the fintech industry will be instrumental in its implementation”, she explains.
She adds: “Finally, the additional $111 million to help speed up the rollout of the consumer data right is also welcome. We hope this will go toward enacting the recommendations in last month’s Senate Committee paper, which includes introducing intermediaries into the system to expedite rollout and uptake of the CDR.”
“These measures along with others mentioned in next week’s budget will form the crux of our discussions at Intersekt the following week”, she notes.
Gautam Saghal, (pictured) Perkbox CEO, describes investing in software as a “risk, especially if you are building a bespoke in-house product.”
He confirms that “it's generally expensive, where you start isn't always where you end up, and the time needed to create new technology often balloons out.”
“This update in tax policy balances the scales. It will encourage more businesses to dabble in in-house innovation, and continue the global reputation Australia has of software companies spinning out from in-house innovation. Over time, this tax policy could create more startups which is beneficial for the entire ecosystem”, he notes.
“We’ll appreciate the ability to depreciate the cost of the proprietary software we are building to support our business.”
“However, while this policy covers most technology buzzwords, it has one glaring omission: electric vehicles. This sector is growing, will create jobs, crucially will encourage economic activity as consumers swap over from combustion engine vehicles to an enterprise value (EV)”, he notes.
He concludes: “We can’t let the transition to EVs become a polarised political issue. It shouldn’t be an election debate topic. Both sides of politics need to get aboard this trend and invest early to ensure Australia is on the front foot with this transition.”