Australian Information Industry Association
Impact of the 2017-18 Federal Budget on the ICT industry
Wednesday, 10 May 2017
The Australian Information Industry Association (AIIA), the nation’s peak member body for the ICT industry, today released its views on how the proposed 2017-18 Federal Budget will impact the ICT industry.
AIIA chief executive officer Rob Fitzpatrick says, “The government is taking a lead in Australia’s digital transformation through greater investment in ICT infrastructure and capability. Through its investments in data analytics, technology platforms, digital identity, cyber security, the expansion of the MyHealth record system, and building digital skills across the public service, government will be much better positioned to deliver efficient, quality services to Australians. These are smart investments that will enable the adoption of future technologies as government services evolve.
A recent Galaxy/AIIA poll (February 2017) suggests that these kinds of investments will also have the support of Australians. The poll indicated that almost all Australians (99%) believe they would benefit from government using the latest technology for service delivery.
“ICT spending should be viewed as an investment towards modernising government and improving services for Australians over the long-term, rather than a one-off line item. The ICT sector welcomes this significant investment.
“Further investment in GovPass is crucial to underpinning Australia’s digital capabilities and is similarly welcomed. We strongly encourage the government to work with the ICT industry in the next phase of this work given the depth of its experience and expertise in this area.
“It’s good to also see spending such as the $100 million manufacturing industry fund to focus on more advanced manufacturing research projects, innovation labs and student research. To successfully transition its economy, Australia needs to reshape traditional sectors such as manufacturing and other sectors not thought of as heavy technology users.
“The annual foreign worker levy or one off payments for visas does raise concerns with respect to additional hiring and human resources costs for companies. There is a critical shortage of qualified people in jobs demanding cyber security, cloud and data and analytics skills, and companies that rely heavily on these skills will have a greater financial burden, particularly small and medium sized enterprises.
“While investment in schools and education is welcome, it’s equally important to ensure our money is going into the right programs that develop the skills young people need to obtain jobs of the future. Australia’s participation in STEM skills at secondary school and university is unacceptably low and will limit innovative capability and productivity in the future.
“As for university funding, the most important thing is to ensure that the proposed reductions don’t negatively impact the ability to build the right graduate outcomes for the ICT industry. Not only is there a shortfall in ICT graduates, but the quality of ICT graduates is not meeting industry needs, with many students lacking skills in critical areas such as cloud computing and cyber security.
“With respect to the Skilling Australians fund, I’m pleased to see there will be a focus on high demand occupations and industries and sectors of future growth. The key will be how well this is executed. Forty-four percent or 5.1 million current Australian jobs are at high risk of being affected by computerisation and technology over the next 20 years, so this will be critical to ensuring Australia’s long-term global competitiveness. Consulting with industry on where the focus needs to be in skills development however is imperative,” concluded Fitzpatrick.
The following is a list of the investments in ICT related activity that the AIIA has identified in the Federal Budget.
- $10.7m to establish Cyber Security Advisory Function in DTA. The new function will support federal government agencies build and procure services and undertake projects that incorporate appropriate cyber security measures from the outset.
- $22.7 million in 2017‑18 to complete the next stage of development for GovPass.
- $350.0 million over three years from 2017‑18 for projects to modernise, transform and enhance the productivity of the Australian Public Service (APS).
- Includes $130m for Data Integration Partnership Australia (DIPA) aimed to remove the data silos across government and through enhanced data analytics, design better-targeted and more effective services in education, social services, health and aged care.
- $374.2 million over two years from 2017‑18 to continue the My Health Record system and expand utilisation of the system through implementation of national opt‑out arrangements.
- $1.5 billion over four years to establish a permanent Skilling Australians Fund (the Fund) to support the skilling of Australian workers.
- $24.0 million over four years for Rural and Regional Enterprise Scholarships program to improve educational attainment, skills development, and employment opportunities for rural and regional students.
- From 2017, at least 1,200 Rural and Regional Enterprise Scholarships of up to $20,000 each will be available for students undertaking undergraduate, post‑graduate or vocational education and training qualifications in priority fields of study including science, technology, engineering, mathematics and health.
Foreign Worker Levy
- From March 2018, businesses that employ foreign workers on certain skilled visas required to pay a levy that will provide revenue for a new Skilling Australians Fund.
- Businesses with turnover of less than $10 million per year required to make an upfront payment of $1,200 per visa per year for each employee on a Temporary Skill Shortage visa and make a one‑off payment of $3,000 for each employee being sponsored for a permanent Employer Nomination Scheme (subclass 186) visa or a permanent Regional Sponsored Migration Scheme (subclass 187) visa.
- Businesses with turnover of $10 million or more per year required to make an upfront payment of $1,800 per visa year for each employee on a Temporary Skill Shortage visa and make a one‑off payment of $5,000 for each employee being sponsored for a permanent Employer Nomination Scheme (subclass 186) visa or a permanent Regional Sponsored Migration Scheme (subclass 187) visa.
- NB: Levy will replace the current training benchmark financial obligations for employers of workers on Temporary Work (Skilled) (subclass 457) visas, which are being abolished, and permanent Employer Nomination Scheme (subclass 186) Direct Entry stream visas.
Treatment of Digital currency
- Alignment of the GST treatment of digital currency (Bitcoin) with physical currency from 1 July 2017. The measure will ensure purchases of digital currency are no longer subject to the GST. Removing double taxation on digital currencies will remove an obstacle for the Fintech sector to grow in Australia.
- Refocusing of the existing Incubator Support element of the Entrepreneurs’ Programme to provide additional support for regional businesses, including additional regional incubator facilitators and grants to support establishment of regional business incubators.
- $100-million fund for manufacturers to diversify and expand their businesses as automotive producers leave Australia.
- Of the funding, $47.5 million will be allocated to an advanced manufacturing growth fund, about $24 million to an advanced research projects to help companies develop new products, $10 million will go to innovation labs in Victoria and South Australia, and $5 million will go towards maintaining engineering expertise by investing in student research
- Funding ($321m) to the AFP for additional resources includes hiring of specialist biometrics and digital forensics capabilities.
About the AIIA
The Australian Information Industry Association (AIIA) is Australia’s peak representative body and advocacy group for those in the digital ecosystem. Since 1978 AIIA has pursued activities to stimulate and grow the digital ecosystem, to create a favorable business environment for members and to contribute to Australia’s economic prosperity. We do this by delivering outstanding member value by providing a strong voice of influence; building a sense of community through events and education; enabling a network for collaboration and inspiration; and developing compelling content and relevant and interesting information.
For additional information or to arrange an interview with Rob Fitzpatrick, please contact:
Joanna Stevens Kramer