Australian government pledges over £1bn to IT

Campaigning prime minister Howard smiles on IT

The Howard government has opened the election year with promises of a $2.9bn Australian dollars (£1.08bn) commitment to IT over five years. The announcement comes just days after the Labor Opposition party announced its own pitch on the New Economy.

The focus of the spend would be on IT industry research and development (R&D), education and dissuading cash-strapped Australian innovators from leaving the country, government officials said.

The fixed sum -- which industry minister Nick Minchin said would be spent over five years regardless of the country’s economic climate during that time -- would see the creation of an additional 2000 university places each year, and would see all research grants, administered by the Australian Research Council (ARC), doubled.

Almost AU$1bn would be allocated in loans to students enrolling in high-tech university courses, officials said.

Minchin said the five-year commitment was based on "very conservative" budget surplus estimates, despite previous warnings from prime minister Howard that the economy was likely to slow.

"Forward estimates indicate healthy surpluses in the forward years. We’ve made a commitment of $2.9bn Australian dollars of that," senator Minchin said. "This is locked in."

The spend would encourage a further $6bn Australian dollars in private industry spending over that time, he said.

The shell-out also falls under the portfolios of IT minister Richard Alston and education minister, David Kemp.

Senator Alston rejected criticisms that Australia's IT industry was a global follower, rather than a leader. However, he admitted the country's IT economy was still heavily fuelled by the low-end consumer market.

"Being a user in itself doesn’t necessarily get you there. Being a low-level consumer is very different from being a high-end business user. What we’re really doing is supplementing a lot of that activity," he said.

The government’s "Backing Australia’s Ability" package includes promises to spend $2.9bn Australian dollars in surplus cash across the industry over five years. Some key spending areas follow:

  • 736m Australian dollars in additional funding for Australian Research Council grants

    583m Australian dollars towards research infrastructure funding

  • Adding 535m Australian dollars to the existing R&D Start program

  • Boosting the R&D tax concession to 175 percent on all additional R&D activity

  • 151m Australian dollars to universities to create 2000 additional places each year with priorities given to IT, mathematics and science

  • 130m Australian dollars toward development of IT, mathematics and science in government schools.

Last week, Labor leader Kim Beazley unveiled one of his key planks -- a visionary University of Australia Online, the foundation stone of his so-called Knowledge Nation.

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