No question, next Tuesday’s Budget is being handed down in a challenging economic and fiscal environment.
It needs to beat inflation, balance the Budget, and incentivise investment. That’s a tough ask.
But luckily, there’s one tried and tested method for doing this: innovation.
In the last 150 years, the three most prosperous periods have been where innovation has turbocharged global economies, lifting productivity, growth, wages and living standards.
That kind of adrenaline pump to our economy is what we need right now to maintain growth while getting inflation down.
Australia may be a mid-sized country, but we have the talent and tenacity to punch above our weight globally when it comes to creating new companies, jobs and ideas.
We have 0.33 per cent of the world’s population, 1.6 per cent of GDP, but 2.3 per cent of all global unicorn tech companies.
Continuing to found, scale and attract companies in strategic industries, and enabling the adoption of technology by businesses, is an economic imperative for Tuesday’s Budget.
It’s the key to reigniting productivity from its 60-year low, combating inflation, keeping good jobs in Australia, and navigating economic headwinds.
It’s why the Tech Council’s top priority for Tuesday’s Budget is targeted investment in high-value industries, including by supporting early-stage commercialisation. Building these new companies, industries and jobs is integral to growing our economy, and protecting our national security.
We welcome the Government’s action to establish the $15 billion National Reconstruction Fund. It can play a major role in filling funding gaps and encouraging co-investment in emerging strategic tech industries like AI, quantum, and robotics – but we also recognise more action can be taken to stimulate investment in high-value industries.
That’s why our Budget submission called for funding to support promising emerging industries such as quantum, and we welcome the recognition of the need for targeted funding in the National Quantum Strategy released this week.
Our submission also called for an ARENA-style funding program to complement the National Reconstruction Fund. A commercialisation-focused funding program would encourage investment in early-stage innovation in lower parts of the TRL scale (complementing the NRF, which is likely to support later-stage commercialisation activities).
Building great companies requires great talent, as well as funding. Australia has some of the best tech talent in the world, but we just don’t have enough to meet demand.
That’s why our submission also supported reform to Australia’s migration system. It’s also why we welcomed the first steps in this reform announced by Home Affairs Minister Claire O’Neil last week.
The Tech Council and the Australian Government have a shared goal of employing 1.2 million tech workers by 2030, requiring an additional 653,000 individuals to join the tech workforce in the next seven years.
Shortages are concentrated in highly technical roles requiring experience. Skilled migration reform will help meet these shortfalls in experienced workers in key areas such as cybersecurity and software engineering. This will also assist in training junior Australian workers to prevent future shortages.
Specialised tracks for high-skill, high-wage, high-shortage roles, improved pathways to permanent residency for temporary skilled migrants and continued efforts to improve administration and visa processing are key areas for reform we support.
This Budget is also an opportunity to take the first steps to improve Australia’s cybersecurity. A priority for this Budget is an improved national response and review framework for major cyber security incidents, which we believe can be achieved through the establishment of the new National Coordinator and Office for Cyber Security.
This is an opportunity to better coordinate the response across government, streamline reporting and disclosure, and ensure major incidents are properly reviewed to learn lessons for the future.
Given consultation on the cyberstrategy only recently closed, we expect it will take more time to confirm and fund the full range of measures Australia needs under the new National Cyber Security Strategy. We look forward to working closely with the government on this.
Smarter delivery – not just more spending – will also be critical for the administration of government programs and services going forward.
There are huge opportunities to improve administration within Government, including through technology, that will deliver better outcomes for the economy and can act as an investment multiplier for initiatives like the NRF.
A number of government programs are gateways to funding, talent and exports for innovative Australian businesses. There is a big opportunity to make sure these programs are administered efficiently so that they don’t inadvertently block or delay access to funding, talent, or customers for these businesses.
That’s why our budget submission called for government to also look at how it can improve productivity by streamlining and improving the administration of areas like visa processing, FIRB and R&DTI.
The foreign investment review process can be improved, as it’s currently acting as a deterrent for foreign investment into tech industries, including from friendly countries like the US. Fixing this is vital to attract co-investment with the NRF.
R&DTI administration could also be modernised, including the application process, R&D definitions, and smoothing of payments.
These reforms are about good practice, and don’t have to cost the Budget, so they may not feature on Tuesday night.
But they’re vital to do, as the Government won’t get full bang for its buck from the money it’s spending in the Budget without them.
Kate Pounder is the CEO of the Tech Council of Australia, the peak industry body for Australia’s tech sector.
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