The tech sector is hoping for more support in this week’s federal budget following the unveiling of a $1 billion digital package last week, with a standalone tax incentive scheme for software claims at the top of the wishlist.
Treasurer Josh Frydenberg will hand down the 2021-22 federal budget on Tuesday night. Prime Minister Scott Morrison last week unveiled the $1.2 billion digital package which will feature in the budget, including $500 million for “enhancements” for myGov and My Health Record.
The rest of the funding will be going towards initiatives including the Consumer Data Right, digital skills training, tech graduates program, artificial intelligence research and a Cyber Security Skills Partnership Innovation Fund.
But leading figures and industry organisations in the tech sector are holding out hope there will be further tech and innovation-focused announcements and funding in the budget.
Front of mind for many in the tech sector is the introduction of a standalone research and development tax incentive (RDTI) scheme for software claims. This was a recommendation from the government-led fintech inquiry, and has been a long-standing desire from many in industry.
Australian Information Industry Association (AIIA) CEO Ron Gauci said such a scheme is crucial to assist with the development of new technologies locally, and a standalone RDTI should also be established for projects of national significance.
“Australia’s ongoing prosperity depends on its ability to innovate requiring leadership, clear policies and a national innovation strategy. As a nation, we must support our innovators and ensure Australia can retain ownership of our brilliant creations and ensure we do not fall behind our international peers,” Mr Gauci told InnovationAus.
For Fintech Australia CEO Rebecca Schot-Guppy, the budget is an opportunity for the government to follow through with many of the recommendations from the fintech inquiry, including the new RDTI for software.
“There have been promising signs from the government to date that it’s taking both the fintech and startup ecosystem seriously. But there’s still more we can do to further its growth,” Ms Schot-Guppy told InnovationAus.
“We would hope that this budget expedites some of the recommendations made in last month’s Senate Inquiry on Australia as a Financial and Technology Centre. Crucially, this includes creating a separate portion of the RDTI for software innovation.”
Mr Gauci is also hoping that the government focuses on the commercialisation of new technologies.
“Following from [the] significant digital budget announcement, which we support, the AIIA would like to see a strategic approach to commercialisation of digital IP developed in this country with particular emphasis on the AI investment announced [last week],” he said.
Also on Mr Gauci’s budget wishlist are further women in STEM initiatives, including career and pathway mapping and mentoring programs, investment in digital upskilling in the public sector and continued funding for Prime Minister & Cabinet once the Digital Technology Taskforce is wrapped up.
There needs to be improved incentives and support for investors looking at Australian companies, according to Australian Investment Council CEO Yasser El-Ansary.
“[The] federal budget announcement provides an opportunity to build on the Digital Economy Strategy announced [Thursday] to grow Australia’s capacity to attract inbound investment through the introduction of a Collective Investment Vehicle for Limited Partnerships,” Mr El-Ansary said.
“We have to do everything possible to boost our global competitiveness and attract new investment into our domestic market from offshore.”
The federal government should also launch a fund to match venture capital investments in local startups, similar to a fund recently launched by the Victorian government, Ms Schot-Guppy said.
“We would like to see the federal government follow the Victorian government in investing its own fund dollars to match VC investments in globally scaling technology companies,” she said.
“While the state government can play a key role in earlier stage funding and new business creation, we believe the federal government can support companies as they look to scale and go global.”
According to Assembly Payments co-CEO Tim Dickinson, it’s time for the government to put its money where its mouth is on fintech.
“We’ve seen plenty of posturing from the government around fintech being the key to Australia’s economic recovery,” Mr Dickinson said.
“This needs to escalate to direct incentives or tax breaks to fintech solving major challenges for our banking industry and creating solutions that directly address our regulatory framework.”
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