Last night Josh Frydenberg handed down the 21/22 Federal budget. The rumour mill had been spinning with sneak peaks being dropped daily in the lead up. Businesses big and small would each be affected by the outcome and many industry leaders came forward with their take on what was announced. We wanted to touch on exactly what the budget means for the technology industry as well as what our experts, here at Talent, had to say about it.
Every business in Australia is now a digital business
Scott Morrison quoted the above sentence last week and it couldn’t ring truer. Over the years the government has put more of a focus on the tech industry and with the announcement last night of the Digital Economy Strategy, at a cost of $1.2 billion, it is going to continuously rise.
The strategy covers digital skills training, development of artificial intelligence technology, and tax breaks for computer games developers. Not only that but the strategy also pours $201 million into the MyGov online portal to access federal government services and $302 million into MyHealth digital records. Businesses will be allowed to depreciate software, patents, designs, copyrights, and other intangible assets more quickly. They will also have tax incentives to promote the development of a stronger gaming industry, funding to help small and medium businesses digitise their processes. Under these changes, the taxpayer will have the option to self-assess the effective life of the asset, giving the intangible asset the same status as a tangible asset. The change will begin on July 1, 2022.
Simon Yeung, Talent’s General Manager in Melbourne, observed the announcement and said: “This will bolster staff and contractor numbers of IT workers with the federal government, adding further pressure to high pay rates in an already tight labour market.”
The package also contains a $124.1 million in initiatives to develop the nation’s capability in artificial intelligence, which includes the establishment of a National Artificial Intelligence Centre led by the CSIRO.
$100 million will be devoted to the development of digital skills throughout the workforce and another $50 million will be devoted to enhancing cyber security.
“The $50 million budget input to cybersecurity is going to make very little difference to a growing problem recently cited by the AFR is the largest challenge to business for the next 12 months.” Yeung said
The future of digital skills
With the government announcing that our international borders will remain closed for at least another 12 months, businesses are going to need to source local business.
Businesses around Australia have had to transform at a rapid pace over the past year due to the pandemic. People have had to build digital apps and services or have started using existing digital services. With the government announcing $100 million will be devoted to developing digital skills, including the creation of cadetships, there will be a big focus on upskilling these businesses. Small businesses are being supported to adopt digital technologies through a $12.7 million expansion of the Digital Solutions – Australian Small Business Advisory Service. A further $15.3 million will be used to drive business uptake of e-invoicing.
On this, Martin Lategui, Avec Business Engagement Manager, Canberra, said: “The government continues to focus on funding service-based agencies to execute a range of existing initiatives to enhance critical service strategies for the Australian public, particularly in the areas of small business, employment and health. Although there is just the one new massive program initiative (MyGov Health Records System) in this latest budget and the DTA's overall funding and staffing levels are set to fall this financial year, we should expect the sugar rush of spending on public sector contractors to continue into the 2022 financial year. I believe this will have a positive impact on opportunities for ICT professional services businesses to partner with government, as agencies continue to seek to create longer term value through SME capability to make up for the shortage of contractors to meet public sector market demand. We are well positioned to assist government with their substantial existing agenda as we look to bring an innovative and outcomes focussed integrated partnering approach to service delivery.”
According to experts in the tech field, there is much more to be done in Australia to position us as a market leader in this space as well as having the skilled workforce to deliver the results.
One last note
Treasurer Josh Frydenberg stated 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. Greater digital adoption will improve our competitiveness and lift our productivity – driving job creation and higher wages.”
There is no denying it, the digital sector is key for Australian businesses to thrive, however with borders closed, and candidates in high demand, the next 12 months will test how well this budget is going to perform.