Labor and Coalition are two cheeks of the same arse on IT

James Riley
Editorial Director

To paraphrase a line from British politician George Galloway, when it comes to building Australian capability in the information technology sector, the Coalition and Labor are two cheeks of the same arse.

There is no daylight between the guiding philosophy of both sides of politics on IT.

And that, of course, is the notion that it is enough for Australia to be an early adopter and sophisticated user of information technology developed overseas – that we don’t need to be a developer of such technology ourselves to enjoy its productivity benefits.

Whether it’s former prime minister Scott Morrison telling Australians “we’re not trying to create the next Silicon Valley here in Australia… we’ve just got to be the best at adopting” or current Prime Minister Anthony Albanese signing Australia up to a whole-of-government Microsoft AI trial without testing the local market (and in the process blowing up a planned federal contract with an Australian company that sells a competing product), the message is the same.

When it comes to information technology, Australian companies face a double whammy. Industry development programs are tepid and government procurement is stacked against locals.

Australian governments for decades have never been shy about flaunting a hard-wired preference for US technology, even when it damages Australia’s own industry.

Parliament house Canberra

The $1 billion investment by the Albanese government and the Queensland government into US-based quantum company PsiQuantum is the latest and most egregious example of the Australian information technology sector getting the stinky end of the stick.

The investment was a terrible idea that followed a terrible process that will have a terrible impact on Australia’s own quantum companies.

Which brings us to government support for capability development in artificial intelligence, arguably the most consequential technology development of our time.

To say that the Albanese government has been asleep at the wheel on AI is an understatement.

While governments around the world have been in a race to develop their domestic AI capability – investing billions in industry support programs – the Australian government has sat on its hands.

Listening to public hearings of the Senate Select Committee on Adopting Artificial Intelligence last week laid bare just how disappointing this government has been in relation to AI.

In fact, it is worth noting that as terrible as the PsiQuantum investment debacle was as a Budget announcement two weeks ago, that was not the worst Budget decision in relation to information technology. No, the worst decision was the zero dollars of industry support for AI.

Perhaps the most articulate critics on the government’s lack of AI investment has been the chief executive of the Australian Information industry Association Simon Bush. (You actually have to marvel at how far south things must have gone for the AIIA to criticise government so vociferously.)

“In 2021, following the release of the government’s AI strategy, there was $124 million allocated in the budget,” Mr Bush told the committee.

“A large chunk of that was going to go towards industry and facilitating the expansion of an AI sector. [But] that money didn’t get spent. Not one cent went to industry,” he said.

With the change of government, $41 million was allocated to AI in last year’s budget and $39 million in the budget two weeks ago. But none of this money was allocated to industry development. Most has been allocated to the department for policy consideration and regulatory costs.

“Not one dollar will go to industry to create a local LLM (large language model) capability,” Mr Bush told the committee. “That’s it.”

“Comparatively, the UK government has invested close to £2 billion. Singapore has invested US$5 billion and Canada US$2.4 billion.

“Government policy settings need to be aligned to ensure they address Australia’s low productivity and anaemic GDP growth. As the [Productivity Commission] has said, AI technologies are an economic productivity driver.”

The Australian government is simply not engaging with local industry with anywhere near the same intensity or level of spending as our global peers. And there will be a cost to this.

Industry and Science minister Ed Husic on Tuesday released an under-cooked national robotics strategy that took two years to deliver and ultimately contained nothing new in terms of funding or major initiatives.

In a speech that acknowledged the fundamental importance of AI to robotics and automation, Mr Husic had nothing to offer.

It is no wonder the industry is so cranky.

Modern economies don’t get to be “early adopters and sophisticated users” without also participating as developers and creators of new technologies and commercialising new-to-the-world applications of technology.

Tech does not get much more fundamental than artificial intelligence. It is incredible that the Australian government does not see a significant role for itself in developing local capability in AI in the way that peer governments around the world have embraced.

Do you know more? Contact James Riley via Email.

Leave a Comment

Related stories