Tepid reaction to tech spending

James Riley
Editorial Director

As the Treasurer Scott Morrison delivered the final flourishes on his election budget speech last night, the pragmatic negativity among delegates at InnovationAus.com’s third Budget Insider event was setting in. That is, save for a few exceptional points of light penetrating the gloom.

This was a community fatigued by disappointment and perhaps even a sense of betrayal. The “Ideas Boom” upon which they once lavished praise and that gave newly-anointed Prime Minister Malcolm Turnbull a visionary’s halo was now looking like a high-water mark.

Nicola Hazell, SheStarts director at start-up accelerator BlueChilli said that the community would have expected more inspiration at a time when technology was delivering “massive” economic disruptions.

Nicola Hazell: Will need to look deeper into the budget papers for inspiration

“There’s a hope that we would have a vision setting conversation. I don’t think we got that,” Ms Hazell said. “Now it’s up to us to go and dig into the detail to see if there are investments we can latch on to”.

Out of a possible 10, the most generous score that tech entrepreneurs and experts in the room could give the budget measures was a five; scores of three or less were more common.

At best, they characterised them as “lacking inspiration” and, at worst, needless political bribes paid at the expense of the nation’s future digital economic prosperity.

The budget was not barren of ICT expenditure measures. Out of the gate and addressing one of the most speculated talking points, the government has decided to rein in R&D tax rorts in an apparent effort to plug a revenue leak estimated to be valued at $2.4 billion.

In a notable symmetry, Mr Morrison said that the government had committed to a $2.4 billion spending package in the budget to boost “Australian public technology infrastructure” — although the fine detail of it is yet to emerge.

Marquee measures of the package include $224.9 million over four years to improve the accuracy of Australia’s industrial-focused global positioning systems (GPS) and position navigation and timing data (PNT), $70 million on system upgrades at the Pawsey Supercomputing Centre, $36.9 million over three years to broaden sectoral access to precise satellite imagery data, and $30 million over four years to improve Australia’s artificial intelligence and machine learning capability.

At a broader strategic level, the government has committed to spending $189.7 million over five years to help “mature age” workers adapt to the “transitioning economy”, $26 million over four years to establish a National Space Agency (plus a further $15 million over three years for grants for strategic space projects), $20 million over four years to develop an Asian Innovation Strategy (in the wake of commitments pledged at the ASEAN-Australia Summit) and $600,000 to “develop a business case” to modernise Australia’s intellectual property patent management.

The government also committed $500 million over ten years to genomic research — however, without a clear commercialisation manifest.

Stone & Chalk expert in residence and Hypereal co-founder Paul Shetler said there was no rhyme or reason to the government’s strategy; it was aimlessly “throwing money around”.

He said Australia was long overdue for a radical overhaul of its technological infrastructure — the likes of which led to the creation of Silicon Valley in the US. On a per capita basis, Mr Shetler said patent lodgements in Australia were woefully lagging other OECD countries.

“From the stand point of wanting a technical, digital design-based economy (the budget) was poor,” Mr Shetler said.

The budget set aside for the keenly-anticipated National Space Agency was almost emblematic of the disappointment felt by industry delegates at Budget Insider.

Media speculation indicated the government had set aside $50 million for the agency to take a tilt at the $400 billion global industry.

instead the government committed just $41 million to space development and diluted the agency’s direct share of the allocation to $26 million.

Freelancer.com chief Matt Barrie said that the sum was paltry next to the anticipated benefit of extending Australia’s participation in the global space industry.

“What does four to five million dollars a year get you? Is it like 20 people in a room with some rent? Maybe in Canberra you’d get a few more people,” Mr Barrie said.

While scant, the budget received some praise, mainly for its measures acknowledging the plight of workers facing the challenge of being replaced by the digital economy’s advances in automation — or attaining the skills to participate in it at all.

Ms Hazell said that the investments in encouraging women to take up STEM-based careers was encouraging with the caveat that the detail still needed examination.

The government’s apparent commitment to “upskilling” was another bright spot for the budget, she said.

“The conversation internationally is about the need for life-long education and training, that we’re going to be existing in a constantly and rapidly changing workforce, that all generations will need clearly transferable skills and that we can no longer rely on one set of skills to get us through a career or a lifecycle,” Ms Hazell said.

“No matter what age we are, we need to be thinking about how that affects us because it is going to affect everybody,” she said.

For Amanda Rose, managing partner at Western Sydney Advisory — a strategic communication and policy advisory— the mention of upskilling was also a welcome riff.

The company operates a social enterprise named Western Sydney Women that aims to promote economic independence for women in the region. Its work has also seen it cut across policy challenges around the impact of innovation-led automation; almost to the point where it’s a dirty word.

Ms Rose said that the $189.7 million skills package could substantially fill the policy gap left by automation which only promises to widen with advancements in robotics — but with a caveat that the solutions are delivered by companies that are also innovative.

“Previously they’ve tried to assist mature age workers with an incentive for companies to hire them, now they’re helping them get the upskilling they need so companies can hire them,” Ms Rose said.

That’s at least interesting.

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