Budget 2021: Digital economy strategy gets nearly AU$1 billion

Two weeks before the 2021 Budget, Canberra has unveiled a multimillion-dollar package to 'secure Australia's economic future and recovery from COVID-19'.

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Image: Asha Barbaschow/ZDNet

The federal government has delivered a new digital economy strategy, which it has described as an investment into the settings, infrastructure, and incentives to grow Australia's digital economy.

In the strategy on a page [PDF], the government declares the digital economy is key to securing Australia's economic future and recovery from COVID-19.

"The Digital Economy Strategy targets investments that will underpin improvements in jobs, productivity and make Australia's economy more resilient," it says.

Despite many arguing the nation is already behind its peers, the government believes Australia's place in the world will be defined by how it adapts to digital technologies and modernises its economy.

"The next 10 years will determine whether we lead or fall behind," it claims.

Although the Digital Transformation Agency (DTA) published a digital transformation strategy in 2018, and refreshed it in November 2020, the package unveiled on Thursday is the largest blanket tech focus the government has had since former Prime Minister Malcolm Turnbull released the National Innovation and Science Agenda back in December 2015.

At the time, Turnbull said the AU$1.1 billion commitment would help Australia be a leading digital economy. Prime Minister Scott Morrison has been criticised for his lack of focus on tech, but he has five and a half years later similarly declared he too wants Australia to be a "leading digital economy" by 2030.

As this strategy is actually a 2021 Budget initiative, around AU$947 million appears to be allocated to the cause. This figure includes funding already announced by the government.

The federal government released a lacklustre refreshed Cyber Security Strategy in August. On Thursday, it added a handful of cyber funding.

"Cybersecurity, safety, and trust are the keystone of our digital economy. Government investments in safety and security are enabling businesses and consumers to actively engage in the digital economy with confidence," the government says.

New investments under the Digital Economy Strategy in Australia's cybersecurity, safety, and trust include: AU$31.7 million to secure future connectivity using 5G and 6G mobile networks; improving standards for trusted identities that underpin the digital environment; strengthening Australia's data security settings through the development of a National Data Security Action Plan.

"The government is committed to protecting Australia's current and future connectivity. The networks Australians and our digital economy rely upon now and into the future must support trusted, safe, and secure connections online," the government says.

"Australians, businesses, and governments are increasingly relying on mobile connectivity to work, study and socialise, and to support development of smart cities and Internet of Things (IoT) solutions."

A "'Secure-G' Connectivity Test Lab", co-designed with industry, will enable businesses to test measures, protocols, standards, and software that "underpin transparent and secure 5G connectivity", the government adds.

It said partnerships and collaboration with industry would shape how the test lab operates.

"Through the 6G security and development program, the Australian government will undertake foundational research into the security requirements of 6G and future connectivity technologies," it explains.

"This will ensure Australia stays ahead of the curve by ensuring technologies are developed with security in mind from the ground-up, and help to shape international future connectivity standards in a way that aligns with our values and expectations around security."

"Cyber" also includes the pre-announced AU$16.4 million over three years for the Peri-Urban Mobile Program to improve mobile phone connectivity in the bushfire prone areas of the peri-urban fringe of Australia's major cities; and a pilot of cyber hubs to improve resilience and cybersecurity maturity of government agencies.

The cyber hubs initiative is flagged as new, but Minister for Employment, Workforce, Skills, Small and Family Business Stuart Robert announced it was on its way just last month.

The government's forthcoming AI Action Plan will set out its idea to build Australia's AI capability to "grow the economy, support industry competitiveness, create jobs, and improve lives". But the Budget is also funding the tech to the tune of AU$124.2 million.

AU$53.8 million over four years will be used to create the National Artificial Intelligence Centre that the government expects will drive business adoption of AI; AU$33.7 million over four years will be allocated for initiatives that support Australian businesses in partnering with government to pilot projects for "AI‑based solutions to national challenges"; AU$24.7 million over six years will be given to the Next Generation Artificial Intelligence Graduates Program to attract and train "home-grown, job-ready AI specialists"; and over a period of five years, AU$12 million will be spent on "catalysing the AI opportunity in our regions" by co-funding up to 36 competitive grants to develop AI solutions that address local or regional problems.

"Establishing the National AI Centre alongside four Digital Capability Centres will lay the foundations for an Australian AI and digital ecosystem," the government explains. "These Centres will help drive business adoption and the use of transformative AI technologies to improve productivity and lift competitiveness."

The National AI Centre will be housed within CSRIO's Data61.

The scholarships, meanwhile, will be co-funded with universities and industry for study at Australian Qualifications Framework (AQF) Levels 8 (Honours) to 10 (Doctoral).

The Budget will also be allocating AU$77.1 million into skills.

This will be shared by the "Digital Skills Cadetship Trial" to deliver work-based learning opportunities for in-demand digital jobs, with AU$10.7 million; AU$22.6 million for the "Next Generation Emerging Technology Graduates Program" that will provide more than 200 scholarships in emerging technologies; and $43.8 million for the expansion of its Cyber Security Skills Partnership Innovation Fund to fund additional innovative projects to quickly improve the quality and quantity of cybersecurity professionals in Australia

The AI graduates program falls under this banner, too, although the funding has already been accounted for under the "AI spend".

"By increasing the supply of job-ready technology specialists, business will be better placed to adopt, adapt and deploy new and emerging technologies. Access to this pipeline of home-grown talent will help drive the competitiveness of Australian businesses and ensure local talent is available to fill high-skilled technology jobs here in Australia," the government says.

Under the banner of "SME digitisation", AU$28 million will be spent on two initiatives.

AU$12.7 million to provide independent advice to Australian small businesses to help them build their digital capabilities through the "Digital Solutions – Australian Small Business Advisory Services program" and AU$15.3 million to enhance the value of electronic invoicing to help businesses reduce costs and increase productivity.

The e-invoicing funding will support the Treasury and the Australian Peppol E-Invoicing Authority to improve business e-Invoicing awareness and adoption, including through work with the likes of Eftpos, Visa, Mastercard, and New Payments Platform Australia to integrate e-invoicing tech with others.

These investments build on the government's near-AU$800 million investment in the Digital Business Plan, which, announced as part of the 2020 Budget, is aimed at encouraging businesses to use digital technologies to grow and create jobs. It also complements the Digital Business-to-Business (B2B) Partnerships Initiative that promotes the adoption of, use of and access to digital products and services. 

The Australian government is also hoping to empower businesses to grow investment in digital technologies.

To that end, the Budget will provide a "digital games tax offset" for qualifying Australian games expenditure to eligible businesses.

It will introduce a 30% refundable tax offset for eligible businesses that spend a minimum of AU$500,000 on qualifying Australian games expenditure.

"This tax offset will make Australia an attractive destination for digital talent," it said.

Consultation with industry in mid-2021 will inform the criteria and definition of qualifying expenditure to support the development of digital games. Games with gambling elements or those that cannot obtain a classification rating will not be eligible, however.

Another measure will allow taxpayers to self-assess the effective life of certain depreciating intangible assets; and the government will also undertake an assessment review of the venture capital tax concessions to ensure they are achieving their intended objectives.

Also included in the new digital economy strategy is AU$200 million for myGov; AU$302 million to enhance My Health Record; AU$111 million to support the acceleration of the Consumer Data Right rollout; AU$40.2 million to deliver the Digital Atlas of Australia; and AU$16.5 million for a pilot program to make the Australian government's data assets discoverable and support whole-of-economy reuse.