Year in review: Back-end 2018

James Riley
Editorial Director

Following’s recap of the first six months of the year, it’s clear that 2018 started with a bang. It’s now time to look at what has been happening in the last six months, which may just put 2018 down as one of the most significant years in public policy and innovation to date.

It would be inconceivable to not firstly point out that during the second-half of the year Australia’s Prime Ministership changed – again. This time Malcolm Turnbull was ousted by his own party and the title was handed over to his own Treasurer and a very enthusiastic FinTech advocate Scott Morrison, who won the Liberal Party leadership ballot.

As result, we saw the cabinet reshuffled and the industry portfolio get a nip and tuck. The word ‘innovation’ was dropped, and Michaelia Cash lost the industry portfolio.

It was a win, however, for Queensland MP Karen Andrews, who was Science minister in the original Abbott Ministry and was promoted into the Cabinet as the Minister for Industry, Science and Technology.

The constant changing of the guards has delivered no relief for the tech sector, which continues to wait for the long-awaited release of the federal government’s Digital Economy Strategy.

Coming into the role as Minister for Industry, Science and Technology, Ms Andrews assured the strategy is on track for release before the year ends (or 11 days from the day this story is published).

The strategy was commissioned in September last year by then industry minister Arthur Sinodinos, before it was handed over to Michaelia Cash when she took up the job.

When released, the strategy will provide case studies of how the digital economy can benefit different industries, such as agriculture, education and health. (Update: The strategy was released as this story was published. Read more here)

Delays on the release had previously been criticised by Labor’s digital economy spokesman Ed Husic, who said the delay was further evidence that the federal government has failed to deliver on its innovation agenda.

Security on all fronts was also big news during the latter half of the year, particularly in relation to the controversial Encryption Bill. The motions surrounding the Bill started when the Senate passed a motion earlier this year that called on the government to support strong encryption and resist any attempts to undermine the process.

The bill ended up being passed on the last sitting day of Parliament, after Labor back-pedalled on its earlier decision to reject the passing of the bill before Christmas, and labelling it “unworkable” and that it would “potentially weaken Australia’s security”. The legislation was passed by the senate with 44-12 votes.

The legislation means the federal government can now force tech companies to help law enforcement access the encrypted messages of customers and for those they do not comply would face fines of up to $10 million.

However, the introduction Encryption Bill did not happen without a fight. Prior to the passing of the Bill, an array of civil and digital rights organisations joined forces with corporate giants in a global alliance to oppose the controversial bill, after it was described as “overreaching”.

Equally sharing the spotlight during the second-half of 2018 was laws surrounding data sharing. The Department of the Prime Minister and Cabinet released an issues paper in July proposing it wants to introduce new laws so it has the right to make more of the citizen data it collects publicly available and shareable for a range of purposes, including research and commercialisation.

However those in the sector, including the Australian Privacy Foundation, warned the government it should heed lessons from the controversial My Health Record first before designing its new data sharing and release legislation.

And in case you missed the news, the federal government was forced to introduce further amendments to the My Health Record system, following recommendations from a Labor-led Senate inquiry. These amendments included increasing the penalties for misuses of a MHR, strengthening security to protect people against domestic violence, and restricting access to employers and insurers. The MHR opt-out deadline was extended to 31 January, 2019.

Chinese telecommunications provider Huawei was also met with some controversy this year. The federal government banned Huawei and ZTE from participating in the 5G network, after Huawei was also banned from any involvement with the National Broadband Network.

It was the result of long-standing fears of new laws passed in China, which compels “all organisations and citizens” to help the country’s intelligence work and alert the government of any vulnerabilities, along with its perceived link to the Chinese government. This is despite Huawei Australia cyber security officer Malcolm Shore refuting the arguments about the company’s connection to the Chinese government are based on “unsubstantiated speculation”.

Discussions around changes to the R&D tax raised during the first-half of the year also heated up in the tail-end of 2018, after the federal government released draft legislation for public comment in July.

The federal government had initially announced in the May Budget that it was going to cut $2.4 billion over four years from the scheme through a range of amendments. In the proposed legalisation these amendments included increasing the R&D expenditure threshold from $100 million to $150 million and enabling the Australian Taxation Office to publicly disclose for the first time details of how much a company has claimed and details of their R&D expenditure.

The proposed changes was met with backlash from Australia’s innovation community. This year’s StartupAus Crossroads report described the changes would be a “critical risk” to Australian startups, and could mean the “life or death” of some businesses.

Chiming in on the argument, the federal opposition pledged to “preserve” the research and development tax incentive after accusing the government of “wrecking” the popular scheme during the Labor Party’s national conference.

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